Do you have a will? I hope so – but if you're just getting around to it, you must face the question of who should be your executor.

My good friend James revised his will two weeks ago. When we spoke about his choice of executor, I had to question his decision. He named Charles as executor. Charles, unfortunately, has a history of questionable judgment. He was recently suspended from work for showing up dressed in full tactical gear to celebrate the opening of the new Iron Man movie.

Choosing your executor is an important task since he or she can affect everything from how much tax you might pay on death to how efficiently your estate is distributed. Here's what to consider when making your choice.

Story continues below advertisement

The decision

Your best bet is to wait to name an executor until you've made decisions about who your beneficiaries will be, the time-frame for making distributions to them, and the manner in which distributions will be made. You'll need to understand the types of assets that will make up your estate (business or foreign assets may require certain expertise, for example).

Other factors that could affect your choice of executor include the expected duration of any trusts you establish in your will, whether you have children from more than one marriage, and your network of friends and advisers.

Your spouse

It can make sense to name your spouse as executor since he or she will understand the family dynamics and be sensitive to the needs of the other beneficiaries, if any. Where your spouse lacks financial understanding, he or she should seek help, or you should consider naming a co-executor who has relevant experience.

One caveat: The Ontario Divisional Court has ruled that if a surviving spouse was named as executor in the will and elects to take his or her share of the estate under the Family Law Act rather than under the will (which your spouse might choose to do if you don't leave him or her with enough of your estate), then he or she cannot be the executor of your estate.

Children

Story continues below advertisement

Naming a child as executor can make sense if your child has financial or business experience. The downside? If you plan to leave money in trust for other children, naming one child as trustee over those trusts could give rise to hard feelings if the trustee-child refuses to take the side of his beneficiary siblings.

Business associates

You might want to name a business associate as executor since he or she would know about any business assets that form part of the estate. Conflicts of interest can arise, however, since a business associate might act in his own interests with respect to the business. A conflict can also arise where the estate controls an operating company and a senior employee of the company is the executor.

Professionals

An accountant or lawyer can bring relevant business and financial expertise to the table. Another option: Require your executor to seek the advice of these professionals when making decisions. You can add a provision to your will permitting your executor to have any professional fees paid for from the assets of the estate.

Corporate trustee

Story continues below advertisement

Many will shy away from corporate trustees due to the cost. But the expense may be a small price to pay for the expertise of the trustee, particularly when your will provides for trusts to continue for a long period of time, your family and friends don't possess the appropriate knowledge or simply don't have the time, and you're looking for objective, professional management.

Other thoughts

It's normally a bad idea to name an executor who lives outside the province where you live and where the assets are located. This used to be done for tax reasons since an estate (which is a trust) would be considered resident (and pay tax) where the trustees reside, but recent court decisions have changed the view on where a trust is considered resident.

Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.